Technology disruption fuels blockbuster third quarter for global technology M&A
Source: EY , Author: Posted by BI-ME staff
Posted: Thu November 17, 2016 11:27 am

INTERNATIONAL.-- /PRNewswire/ -- Tech and non-tech companies being disrupted by innovative digital technologies turned to M&A in numbers that made Q3 2016 another blockbuster quarter for global technology M&A value, according to the EY Global technology M&A report — July-September final look.

With US$155.5b in disclosed value, 3Q16 is now the third-highest aggregate value quarter on record. This marks an increase of 22% from 2Q16 and 138% year-over-year (YOY). At US$349.4b, year-to-date (YTD) aggregate value is 30% higher than YTD 2015's all-time record pace.

Last quarter's new record for the most tech deals at or above US$1b was surpassed in 3Q16 with 32 deals, four more than the prior record of 28 big-ticket deals in 2Q16. With total aggregate value of US$129.7b, their value more than triples that from 3Q15.

Jeff Liu, EY Global Technology Industry Leader, Transaction Advisory Services, says: "Technology dealmaking is setting records because all buyers are motivated in the current environment. Incumbent tech companies seek deals to accelerate mobile- and cloud-driven transformations; non-tech companies seek strategic technologies; and private equity (PE) firms seek opportunity in hidden gems overlooked by many investors."

M&A records set by private equity firms and cross-border (CB) buyers

PE tech dealmakers drove a second consecutive record high for aggregate quarterly disclosed value at US$36.1b, 40% above 2Q16's prior record.
CB aggregate deal value soared to US$80.4b, eclipsing the prior all-time record by 85%. YTD 2016 already set a new full-year CB value record.

Third-quarter growth drivers
While semiconductor targets had more disclosed value (US$54b) than any other technology segment, several key areas experienced dramatic growth:
- Five deals above US$1b drove security to a sevenfold YOY increase in aggregate disclosed deal value to US$16.9b.
- Deals targeting smart mobility and advertising and marketing technologies quadrupled YOY in disclosed value, rising 305% and 333%, respectively.
- Internet of Things (IoT) value nearly tripled YOY on the strength of four such deals — including the quarter's top deal by dollar value, at US$32.4b.

To view a full copy of the EY Global technology M&A report — July-September final look, click here.

Photo Caption: Jeff Liu, EY Global Technology Industry Leader, Transaction Advisory Services

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
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This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About EY's Global Technology Sector
EY's Global Technology Sector is a global network of more than 21,000 technology practice professionals from across our member firms, all sharing deep technical and industry knowledge. Our high-performing teams are diverse, inclusive and borderless. Our experience helps clients grow, manage, protect and, when necessary, transform their businesses. We provide assurance, advisory, transaction and tax guidance through a network of experienced and innovative advisors to help clients manage business risk, transform performance and improve operationally. Visit us at ey.com/technology.

About the EY Global technology M&A report — July-September final look
The July-September 2016 issue is based on EY's analysis of The 451 Group M&A KnowledgeBase data. Deal activity and valuations may fluctuate slightly based on the date the database is accessed. The full report is available at ey.com/GL/en/Industries/Technology/ey-global-technology-mergers-and-acquisitions.

 

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